Commercial NRW Reduction Reduction of administrative components

Contents Introduction Unbilled authorised consumption Unauthorised consumption Meter reading errors Accounting errors Important pillars

Introduction

Key components of commercial loss introduction

Unbilled Authorised Consumption Unauthorised Consumption Key components of commercial loss Unbilled Authorised Consumption Water legitimately consumed but not billed, such as: Water fountains; Pipe and sewer flushing; Watering parks and gardens; Public drinking fountains; Fire fighting hydrants, Exempted customers (metered or unmetered) Unauthorised Consumption Legitimate connections that were never entered into the billing system and are therefore never invoiced (intentional and accidental) Permanent or temporary meter bypass Illegal connections Illegal use of fire hydrants Meter tampering Meter Inaccuracies Volume under-recorded by revenue meter due to its condition or installation Over-sized revenue meters Meter Reading Errors Corruption meter readers (collusion with customers) Meter reading errors (mistakes, or unreadable meters) Estimated readings Accounting Errors Data handling errors billing department Bills sent to wrong address introduction

Approach to commercial loss reduction Commercial NRW includes technical and administrative components. In this presentation we will focus on the reduction of administrative components. Unbilled Authorised Consumption Unauthorised Consumption Meter Inaccuracies Meter Reading Errors Accounting Errors introduction

2.Unbilled authorised consumption

Unbilled authorised consumption Key components unbilled authorised consumption Unbilled authorised consumption is in theory the only element of NRW that a utility commits to voluntarily (although it may be sometimes enforced by law) and therefore does not necessarily have to be reduced. Eaxmples of components of water legitimately consumed but not billed are: Water fountains Pipe and sewer flushing Watering parks and gardens Free public drinking fountains Fire fighting hydrants Exempted private customers Unbilled authorised consumption

Unbilled authorised consumption Reducing unbilled authorised consumption Unbilled authorised consumption may be metered or unmetered. This does not matter for the level of NRW, however, metering does help to calculate of how much water the utility gives away for free and therefore the analysis of the total level of NRW It is only by knowing and understanding – through metering and analysing – the unbilled authorised consumption that a water utility can choose to reduce its NRW Image: WTOP Unbilled authorised consumption

3.Unauthorised consumption

Unauthorised consumption Key components unauthorised consumption The most regularly occuring components of unauthorised consumption are: Legitimate connections that are never invoiced, for example because: The new connection was never entered into the billing system The billing system was not updated with customer details, such as people moving home, dis- or re-connections Illegal consumption, through: Meter by-passes Meter tampering Illegal connections Illegal use of fire hydrants Unauthorised consumption may occur through: Mistakes on the water company’s side Illegal activity by the customer Collusion between water company staff and customers Unauthorised consumption

Unauthorised consumption Reducing not-invoiced customers One of the components of unauthorised consumption are legitimate connections that are never invoiced because the billing database is not up to date. In order to reduce and manage NRW it is important to regularly clean up the database. This is done by: Going through the billing database and verifying all customers using Meter reader lists to see whether he/she can locate the all customers in his/her area and if addresses correspond Collection data to see which customers do not pay and what is the reason for this (do they receive invoices?) Organise field actions to verify billing database and GIS data: For each DMA, take a copy of the billing database and GIS maps showing all properties and their reference numbers Walk the DMA; check if the GIS map is up to date and billing database accurate Identify properties that mismatch with the GIS plan and billing database Identify properties not on billing database; investigate and take action Update the GIS plan and billing database Unauthorised consumption

Unauthorised consumption Reducing not-invoiced customers Unauthorised consumption

Unauthorised consumption Reducing illegal consumption It is important to actively reduce illegal consumption, because: It causes a loss of revenue to the water company Connections are likely to be of poor quality. Therefore, they may leak and be a source of contamination Not actively reducing NRW may encourage others to illegally connect and aggravate the problem NB Illegal consumption usually happens at a much larger scale by commercial users Unauthorised consumption

Unauthorised consumption Reducing illegal consumption Awareness campaigns for customers Customers may be affected by water theft as it may cause higher water tariffs and lower water quality Good communication with customers is important, so that it is easy for them to contact the water company when they see irregularities (for instance by having a trusted spokesman, or a free and anonymous phone line) Awareness campaigns for meter readers To understand the consequences of water theft To be able to recognise illegal connections and meter tampering To know how to act when finding illegal connections Offer good and affordable service to everyone so that there is no need to steal Organise targeted searches in suspected areas Regularly visit large consumers (commercial) and check their installations Check temporary water connections at construction sites, etc. Metering fire hydrants Unauthorised consumption

4.Meter reading errors

Key components meter reading errors Meter reading errors (accidental) Reading or writing mistakes Unreadable meters Corruption meter readers (intentional) Collusion with customers Estimated readings People charged a fixed fee based on an estimated consumption Meter reading errors

Reducing meter reading errors Make sure meters are readible (replace unreadable meters) Communication with customers is important, as they can verify their own bills and inform the company if bills are too high or low Rotate meter readers to avoid customer collusion Undertake data analysis Is the consumption logical for the (type of) customer? Is the consumption of each customer in line with previous consumption of that customer? Use software that can highlight outliers Undertake ad-hoc rounds of data verification in the field Use hand held meter reading devices to avoid data errors Reduce (if possible to zero) the number of customers billed based on estimates Meter reading errors

5. Accounting errors

Key components accounting errors Data handling errors billing department Bills sent to wrong address Not officially part of the IWA water balance, but an important element in a commercial revenu loss is inefficiency in collection. Even if the Billing-Collection ratio is as high as 87% this means that 13% NRW occurs through non-paying customers (whether calculated in the water balance or not). Therefore we add as a component; Billing-collection ratio Accounting errors

Reducing accounting errors Use a good billing database. Robust software can: Identify potential data errors Make reports of zero-readings Undertake data analysis Is the consumption logical for the (type of) customer? Is the consumption of each customer in line with previous consumption of that customer? Use software to highlight outliers Going through the database and verify all customers using meter reader lists and data from collection Organise field actions to: Verify billing database and GIS data Identify meters needing replacement Use of electronic meter reading devices Communication with customers is important, as they can verify their own bills and inform the company if bills are too high or low Accounting errors

Improving collection efficiency Reach out to all customers with debt Depending on the height of debt, how long it has been standing for and how many warning they already had, disconnect them or give them a deadline for payback Work out a payback scheme Pro-actively engage ‘gate-locked’ consumers Install pre-paid meters They are more expensive and might only be a good solution for public taps Image: Waterworld Accounting errors

6. Organisation

Tackling administrative components In this presentation we have seen that there are a number of important elements to look at when tackling the administrative components of commercial NRW reduction. These include: Careful metering of water use Thorough data analysis Creating awareness among utility staff as well as customers Maintaining good customer relations To be able to maintain this, it is important to have a well organised commercial department with clear processes in place organisation

Organisation of commercial department Aspects of the organisation of the customer department: Organogram Staffing Tasks and responsibilities Processes and standard operating procedures Job descriptions Training organisation

Processes supported by standard operating procedures Primary processes: Meter reading Billing Collection Debt management Customer relations Supporting processes: New connections Disconnections Re-connections Legalisation of illegal connections Moving Meter changing Complaints registration and handling Reporting and monitoring Supportive operating procedures: Billing and collection software Integration with Customer database Integration with GIS/Financial systems Minimum requirements: registration of primary and supporting processes Reporting Standard reports on paper and on screen Ad hoc reports Export to excel Monitoring and analysis Development (e.g. price, consumption, number of connections) Budget analysis Sensitivity analyses organisation

O&M of customer relations The most important O&M activities for customer relations are: Have a clear line of contact for customers (customer phone line, or office desk) Solve customers’ complaints Reporting of customers complaints Keep the contracts up to date Formalise communication (letters, emails, phone, sms, visits if necessary) Analyse consumption and find the cause for large deviations Take care of special requirements of large customers Keep the list of customers up to date Disconnect and reconnect customers in a timely manner Making new connections on the existing system Check water tariffs organisation 27 27